Director temporarily suspended from leaving the country due to tax debt of less than 1 million VND

Recently, to strengthen budget management, the financial sector has urgently handled tax debt collection, and the number of people forced to temporarily suspend exit due to tax debt has also tended to increase.

More and more business leaders are banned from leaving the country because of tax debts, even for very small amounts, less than 1 million VND.

At the end of May, according to Thanh Nien Newspaper, the Saigon Port Customs Branch, Region 4 (Ho Chi Minh City Customs Department) sent 5 notices to the Exit Management Department requesting temporary suspension of exit for a number of legal representatives of businesses with tax debts.

Among them is the case of Ms. LHB - Chairwoman of the Board of Directors and Director of GT Chemical Trading Company Limited (Binh Duong). Ms. LHB was requested to temporarily suspend her departure from the country from May 18 on the grounds that the company she is legally representing owes VND997,222 in taxes.

According to the An Ninh Thu Do Newspaper, several other business leaders were also banned from leaving the country due to tax debts. In some cases, the amount of tax debt was not large.

Among them, there is Mr. TTQ, Director of Ngoc Dieu Construction, Trade and Service Company Limited. This enterprise was forced to pay tax debt of just over 10 million VND.

Similarly, Mr. DHS, Chairman of the Board of Directors of Saigon Dong Duong Wood Company Limited, was also temporarily suspended from leaving the country from May 18 because the company owed more than 61 million VND in taxes.

In February, the director of a company in Ho Chi Minh City was also temporarily suspended from leaving the country because the company owed VND1.1 million in taxes, not including late payment penalties.

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Many cases of temporary suspension of exit due to tax debt. Photo: Hoang Ha

Departure suspension will be a drastic measure.

In fact, the ban on exiting the country due to tax arrears has been in place for several years now. But the issue has recently gained attention when a long list of businessmen on the tax arrears list were listed on the local customs information page.

Many people think that this regulation is necessary but somewhat rigid. Among those who owe taxes, there are many who are in financial difficulty, and there are also those who do not know they owe taxes. A tax debt of only a few hundred thousand dong is also prohibited from leaving the country, which is not appropriate.

Some people think that there should be clearer regulations on this issue. For example, increasing the threshold for tax debt to be applied to prohibit exit, because no business can evade a few hundred thousand dong in taxes, or the tax authority must find a way to let the person executing the decision know that he owes taxes, and that if he does not comply by a certain deadline, he will be prohibited from leaving the country.

Discussing this issue, lawyer Nguyen Quoc Toan, Director of IAM Law Firm (HCMC), told Thanh Nien that tax debt, even 1 dong, is a violation and individuals and businesses involved in overdue tax debt are all subject to the same legal provisions. Taxes do not distinguish between rich and poor. That is, there is no such thing as a small or large debt, only overdue debt is a violation.

Responding to the press, Associate Professor Dr. Dinh Trong Thinh (Academy of Finance) commented that current law does not specifically stipulate the amount of tax debt that is prohibited from leaving the country. Thus, to ensure the strictness of the law, regardless of whether the tax debt is large or small, exit from the country can be temporarily suspended.

Meanwhile, tax expert Nguyen Van Duoc said on the Financial Market Page that the prohibition of exit due to tax debt is stipulated in the Tax Administration Law. The amount of tax debt under 1 million VND compared to the business's operations and capital scale is very small. Therefore, if the reason for not being able to pay this tax is due to difficulties is unreasonable and shows signs of procrastination.

Lawyer Nguyen Thanh Ha, Chairman of SB Law Firm, shared on Vietnambiz that in the immediate future, the tax authority should propose a tax debt level when applying the temporary exit suspension measure, such as an individual owing over 100 million VND in taxes or a business owing over 1 billion VND.

Regarding this issue, in early June, the Ministry of Finance issued a statement stating that: currently, the number of taxpayers with tax debts of less than 1 million VND is very large, most of which are prolonged. In cases of temporary exit suspension, tax authorities will review, compare, and accurately determine the tax payment obligations of taxpayers subject to temporary exit suspension before sending a notice requesting temporary exit suspension to the immigration management agency and the taxpayer so that the taxpayer can fulfill their tax payment obligations before leaving the country.

"To enhance taxpayer compliance, the temporary suspension of exit will be a tough measure as well as a warning to taxpayers with tax debts to ensure the completion of tax obligations to the state budget," the Ministry of Finance's announcement stated.

Talking to VietNamNet in the middle of the week regarding this issue, Mr. Ngo Van Thuan, Deputy Director of the Quang Binh Provincial Tax Department, said that the tax authority's proposal to ban the exit does not depend on the amount of debt of the units. There are units with large debts but stable production and business activities, low risks and may not be proposed to ban the exit. On the contrary, there are units with smaller debts, but if they are found to have risk factors, the Provincial Tax Department will propose to temporarily suspend the exit of the legal representative.